Mobile Search Becomes Focus For Yahoo

Mobile makes up about 20% of searches globally for Yahoo. In some regions, such as Indonesia, 80% of all searches on Yahoo come from mobile. In the United States that number ranges between 10% and 15% on feature phones and smartphones, according to Shashi Seth, senior vice president of search products at Yahoo.

In the next 12 to 18 months, mobile searches in the U.S. should account for between 25% and 30%, Seth said during a call with Macquarie Securities analyst Ben Schachter. Searches on smartphones contribute between 7% and 8% sequentially. Mobile revenue continues to increase at about 100% year-over-year.

Smartphones, compared with feature phones, produce higher revenue per search (RPS), but tablets are a "work in progress," he said.

Yahoo continues to use two different ad-serving platforms. In the United States, Yahoo relies on Microsoft adCenter; and internationally, it continues to use its Panama platform. Seth did mention that all international algo search results, except Korea, switched to Microsoft as of Thursday, Sept. 15.

In the past 17 months, Yahoo has gained Web search market share because of a focus on product features, according to Seth. He points to relationships with U.S. telecom carriers AT&T, Sprint, U.S. Cellular and Metro PCS, as well as original equipment manufacturers such as Apple.

Nearly 30% of U.S. mobile traffic to Yahoo comes from iPhones. Although the feature does not exist yet on mobile, it might explain why earlier this year, Apple engineers approached counterparts at Yahoo requesting support for a feature in the iOS X Lion platform that gives consumers the ability to search on highlighted terms.

The feature has become available on laptops and computers, Seth said. He emphasized the point to demonstrate the Sunnyvale, Calif. company's ability to work with tech innovators.

It turns out that 32% of overall mobile global searches on Yahoo come from iOS devices, Seth said. As searches on iOS devices continue to increase, it will become more important to "fix" or improve RSP before returning to Apple to renegotiate future partnerships and agreements.

Apparently, RPS contributes to the decision on what engine becomes the default on Apple devices. The default search engine contract between Apple and Google recently renewed.

In August 2011, Google held the majority of explicit core search traffic share -- 64.8%, according to comScore, but Seth estimated 30% of Yahoo's search traffic comes from users who can't find what they're looking for on Google. Yahoo's share of search traffic for the month rose slightly from 16.1% in July to 16.3% in August.